Britain's 5p and 10p coins are to be substantially changed next year, causing
potential chaos for the millions of people using vending machines and
parking meters.

The changes, which involves the coins being made from a different metal and becoming thicker, have never been officially announced by either the Royal Mint or the Treasury. Some experts have told The Daily Telegraph the change is a "disaster" and they are becoming increasingly alarmed the new coins will fail to work in hundreds of thousands of machines, and that the costs of implementing changes will run to as much as £100 million.

The "silver" 5p and 10p coins have always been made from a metal known as cupronickel, an alloy made of 75 per cent copper, 25 per cent nickel. Indeed, all shillings, which preceded the 5p coin, were made from cupronickel following the end of World War II.

However, from January 1 next year they will be made from steel, with a nickel coating. In most respects they will look identical and weigh the same, but sharp-eye observers will notice they will be 11 per cent thicker, moving from 1.7mm in depth to 1.9mm.

They will also become magnetic for the first time.

The change, proposed by the former Labour government, is designed to save the Royal Mint between £7 million and £8 million a year, allowing it to use steel rather than copper, which has surged in price over recent years. Making the cupronickel alloy is also a relatively expensive process.

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However, while most shoppers and schoolchildren receiving their pocket money might not notice the difference, nearly all vending machine and parking meters will. Office workers buying a cup of coffee or someone in a rush to park their car could suddenly find their money – perfectly legal tender – is not accepted.

Jonathan Hilder, the chief executive of the Automatic Vending Machine Association, whose members service 500,000 vending machines in Britain, said: "We've told the Treasury and The Royal Mint that this is going to be a disaster, but they haven't taken notice.

"It's meant to be a money saving exercise, but this will cost the vending industry £42 million and the coin machine industry as a whole possibly as much as £100 million."

The problem comes about because tea and chocolate dispensers, as well as parking meters are sophisticated machines designed to detect fraudulent coinage. They test each coin by shape, weight as well as its electromagnetic composition.

All machines will have to have their software updated, and in most instances, need to be recalibrated to recognise both the new coins and the old ones, which will continue to be in circulation for at least a decade.

While the Royal Mint has given the industry a few samples of the new coins, they have not provided final production versions, making it impossible to start changing the machines. The industry said it does not have enough engineers to undertake the overhaul in less than four months.

Manny Rasores, at the British Parking Association, said: "Most meters don't accept 5p, but they do take 10p. It means every single bit of parking equipment will have to be changed. This is going to be a considerable investment for all the local authorities, and who will ultimately pay for this? It will have to be local taxpayers."

This is not th first time the Royal Mint and the Treasury have come under fire for the state of Britain's coins. In July the Royal Mint admitted there was a record £41 million fake £1 coins in Britain – one in every 36 in circulation, double the proportion compared with ten years ago.

A similar change to the 1p and 2p coins was made in 1992, with those made before that date non-magnetic bronze, while those made afterwards a magnetic copper-plated steel. The vending machine industry said that this change did not cause any problems because most machine never accepted coppers.

Andrew Mills, director of circulating coins at The Royal Mint, said that the general election had slowed down the process of passing on final coins to the vending industry.

He added that the concerns of the industry "have been taken very seriously and from the communications we’ve had with various sectors we understand that they are keen to facilitate this change both swiftly and cost effectively".

A spokesman for the Treasury said: "The proposal to make new 5p and 10p coins out of nickel-plated steel rather than a cupro-nickel alloy is one of many measures being considered by the Government with a view to reducing the fiscal deficit."